Solution of Cma

Topics: Manufacturing, Costs, Cost Pages: 4 (748 words) Published: June 5, 2013
Solution to conceptual cases of management accounting


Case 1

1.Beginning DM inventory + Purchases – Ending DM inventory = DM used Rs.16,000 + Rs.275,000 – Ending DM inventory = Rs.200,000 Ending DM inventory = Rs.91,000

2.Units in beginning finished goods inventory = Rs.3,510/Rs.5.85 = 600 units

Since 10,000 units were manufactured and 600 were in beginning finished goods inventory, 10,600 units were available for sale. But 8,900 units were sold, so ending finished goods inventory is 1,700.

3.Cost of goods manufactured = Rs.93,000 + Rs.50,000 – Rs.18,750 = Rs.124,250

4.Prime cost = Rs.19.50 = Direct materials + Direct labour
Direct materials = Rs.19.50 – Direct labour

Conversion cost = Rs.32 = Direct labour + Overhead
Overhead = Rs.32 – Direct labour

(Rs.19.50 – Direct labour) + Direct labour + (Rs.32 – Direct labour) = Rs.39.50 Direct labour = Rs.12

Direct materials + Direct labour = Rs.19.50
Direct materials + Rs.12 = Rs.19.50
Direct materials = Rs.7.50

5.Total manufacturing costs + BWIP – EWIP = COGM
Rs.156,900 + Rs.60,000 – EWIP = Rs.125,000
EWIP = Rs.91,900

Prime cost + Overhead = Total manufacturing costs
Rs.90,000 + Overhead = Rs.156,900
Overhead = Rs.66,900

Case 2

1.H. P. Company
Statement of Cost of Goods Manufactured
For the Month of March

Direct materials:
Beginning inventoryRs.40,300
Add: Purchases70,000
Direct materials available for useRs.110,300
Less: Ending inventory16,500
Direct materials used in productionRs.93,800
Direct labour22,000
Total manufacturing costsRs.332,650
Add: Beginning work in process10,000
Less: Ending work in process(7,350)
Cost of goods manufacturedRs.335,300

2.H. P. Company
Cost of Goods Sold Schedule
For the...
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